Solaris Energy Infrastructure, Inc. Q1 FY2025 earnings call

• Bill Zartler discussed the strong performance of both segments, with power solutions seeing a contract upsized to 900 megawatts over seven years, a joint venture closed, and securing 330 megawatts of additional generation capacity. The logistics segment had system activity up over 25%, early mover advantage in electrification, and synergies between segments. - Kyle Ramachandran provided details on the updated order book, growth capital spending, financing, guidance for Q2 and Q3 adjusted EBITDA, and addressed tariff impact mitigation, noting most turbine spend is in US, some in-house manufacturing to reduce costs.

Solaris has two business segments. The power solutions segment saw a significant upsizing of a commercial contract to approximately 900 megawatts over seven years, with a joint venture where Solaris owns 50.1%. The power fleet is expected to reach approximately 1,700 megawatts operated by Solaris, with net ownership of around 1,250 megawatts. Power solutions contributed 55% of total segment adjusted EBITDA in the first quarter. The logistics segment had strong first quarter performance with system activity up over 25% sequentially, benefiting from seasonal rebound, new customer wins, and continued adoption of the top-fill system. Approximately 75% of locations were equipped with both legacy SAN silo system and top-fill system, doubling earnings potential at individual well site level.

• For Q2 2025, expected activity as measured by average megawatts earning revenue to increase 13% sequentially to 440 megawatts, adjusted EBITDA between $50 million and $55 million. - For Q3 2025, expected average megawatts on revenue to increase by 18% to approximately 520 megawatts, adjusted EBITDA between $55 million and $60 million. - At full deployment, potential for total company consolidated adjusted EBITDA run rate of $575 million to $600 million, net to Solaris approximately $440 million to $465 million.

• Tariffs: Ultimate impact unknown, but factors like primary turbine vendor manufacturing in US, fixed pricing on most orders, and in-house manufacturing of SCR components mitigate impact. - Supply chain: OEM supply chain has gotten tighter, but efforts to secure capacity and in-house manufacturing help.

Q: Stephen Gengaro asked about uncontracted assets and EBITDA per megawatt.

A: Bill Zartler and Kyle Ramachandran discussed demand for uncontracted assets and dollar-per-megawatt economics smoothing out.

Q: Derrick Whitfield asked about air permits and SCR value.

A: William Zartler said customer is in compliance and SCR is a cost of doing business.

Q: Derek Podhaizer asked about power portfolio and capacity.

A: Kyle Ramachandran explained additional capacity at first data center and no plan to move it to JV.

Q: Thomas Meric asked about contracted vs spot mix and larger turbines.

A: William Zartler and Kyle Ramachandran discussed spot vs medium-term contracts and discussions on larger turbines.

Q: Jeff LeBlanc asked about current client influencing future data center contracts.

A: William Zartler said current client's success is influencing negotiations.

Q: Don Crist asked about oilfield weakness and oil prices.

A: William Zartler and Kyle Ramachandran discussed oilfield weakness dependent on oil prices.

Q: Bobby Brooks asked about securing additional megawatts and diversification.

A: William Zartler and Kyle Ramachandran discussed repeatability of securing megawatts and diversification efforts.

Q: Sean Mitchell asked about margin profile between data center and industrial.

A: William Zartler said scale gives operating leverage but pricing similar.

Q: Stephen Gengaro asked about logistics new customers and market share.

A: William Zartler discussed new customers driven by technology and outperforming market.

Q: Bobby Brooks asked about CapEx guidance.

A: Kyle Ramachandran said CapEx guidance is a function of timing.

Q: Jeff LeBlanc asked about industrial end markets.

A: William Zartler discussed various industrial applications like metals manufacturing, LNG, etc.